The anticipated $7bn auction for Vin & Spirit, the maker of Absolut Vodka, was formally launched today, kicking off what could be one of the biggest and most fiercly contested corporate auctions of 2008.
The auction will be led by four of the world's biggest drinks groups: Pernod Ricard, Bacardi, Fortune Brands, and Diageo. All four companies have retained their advisers and are waiting for financial details on Vin & Sprit.
The Swedish government is selling V&S, which makes Absolut Vodka, as part of a $31bn drive to privatise six state-owned companies. The group, which is one of the world's 10 biggest alcoholic beverage companies, is valued at between $5bn and $7bn. As well as Absolut, V&S owns the Level Vodka, Cruzan Rum, Plymouth Gin and FRIS Vodka brands.
Pernod Ricard, which two years ago acquired brands from Allied Domecq, the British maker of Ballantine's whisky and Beefeater gin, has hired JP Morgan to advise on its bid for Absolut.
The French drinks group will face fierce competition from Bacardi, the privately-owned Bermudan group, which has hired NM Rothschold to advise on its bid for Absolut.
Bacardi, which already owns the Grey Goose vodka brand, would overtake Pernod to become the
world's second biggest spirits company behind Diageo if it acquired Vin & Sprit.
Fortune Brands, which has hired Credit Suisse to advise on its bid, may have a competitive advantage over its rivals in the auction because it is the US distributor of Absolut.
Diageo, which already owns the Smirnoff vodka brand, has also signalled its interest in the auction and is using UBS and Greenhill as its corporate adviser.
